CGST Section 49: Payment of Tax, Interest, Penalty and Other Amounts

Provisions under Section 49 of the CGST Act 2017 relating to “Payment of Tax, Interest, Penalty and Other Amounts”:

Section 49: Payment of Tax, Interest, Penalty and Other Amounts (CHAPTER X: PAYMENT OF TAX) [*1]

(1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed.

(2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41 [*2(a)&4(a)], to be maintained in such manner as may be prescribed.

(3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed.

(4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and restrictions [*4(b)] and within such time as may be prescribed.

(5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of–

(a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;

(b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;

(c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax; [*2(b)]

(d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax; [*2(b)]

(e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and

(f) the State tax or Union territory tax shall not be utilised towards payment of central tax.

(6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of section 54.

(7) All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register in such manner as may be prescribed.

(8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely :–

(a) self-assessed tax, and other dues related to returns of previous tax periods;

(b) self-assessed tax, and other dues related to the return of the current tax period;

(c) any other amount payable under this Act or the rules made thereunder including the demand determined under section 73 or section 74 or section 74A [*5].

(9) Every person who has paid the tax on goods or services or both under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods or services or both.

(10) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under this Act, to the electronic cash ledger for,- [*3&4(c)]

(a) integrated tax, central tax, State tax, Union territory tax or cess; or

(b) integrated tax or central tax of a distinct person as specified in sub-section (4) or, as the case may be, sub-section (5) of section 25, in such form and manner and subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be a refund from the electronic cash ledger under this Act:

Provided that no such transfer under clause (b) shall be allowed if the said registered person has any unpaid liability in his electronic liability register.

(11) Where any amount has been transferred to the electronic cash ledger under this Act, the same shall be deemed to be deposited in the said ledger as provided in sub-section (1). [*3]

(12) Notwithstanding anything contained in this Act, the Government may, on the recommendations of the Council, subject to such conditions and restrictions, specify such maximum proportion of output tax liability under this Act or under the Integrated Goods and Services Tax Act, 2017 which may be discharged through the electronic credit ledger by a registered person or a class of registered persons, as may be prescribed. [*4(d)]

Explanation: For the purposes of this section,-

(a) the date of credit to the account of the Government in the authorised bank shall be deemed to be the date of deposit in the electronic cash ledger;

(b) the expression,-

(i) “tax dues” means the tax payable under this Act and does not include interest, fee and penalty; and

(ii) “other dues” means interest, penalty, fee or any other amount payable under this Act or the rules made thereunder.

Notes (History of Amendments in Bare Text):

1. CGST Section 49 introduced vide GOI Notification dated 12/04/2017, followed with CBEC Notification 9/2017 on commencement date of 01/07/2017.

2. Amendments vide Section 20 of the CGST (Amendment) Act, 2018, followed with Notification 2/2019 on commencement date of 01/02/2019 (except for clause (a) below for which effective date will be separately notified later):

(a) The words ‘or section 43A’ inserted in sub-section (2), pending commencement.

(b) Proviso to clause (c) & (d) of sub-section (5) inserted.

3. Sub-sections (10) and (11) inserted vide section 99 of the Finance Act, 2019, followed with Notification 1/2020 on commencement date of 01/01/2020.

4. Amendments vide Section 110 of the Finance Act 2022, followed with Notification 18/2022 on commencement date of 01/10/2022 (except for substitution of sub-section (10) of section 49):

(a) in sub-section (2), the text “or section 43A” shall be omitted;

(b) in sub-section (4), the text “and restrictions” shall be inserted after the text “subject to such conditions”;

(c) sub-section (10) substituted from 05/07/2022 (commencement date as per Notification 9/2022). Please refer Finance Act, 2019 for text thereof before substitution.

(d) sub-section (12) inserted.

5. In clause (c) of sub-section (8), the text “or section 74A” inserted after the tax “section 73 or section 74”, vide Section 125 of the Finance Act (No. 2) 2024, followed with Notification 17/2024 on commencement date of 01/11/2024.